E 509 

.K45 REPORT 

Copy 1 



STATE AGENT FOR KENTUCKY 



AT WASHINGTON, 



MADE TO THE GOVERNOR, JANUARY 1, 1808. 



FEAKKFOET, KT.: 

PRINTED AT THE KENTUCKY YEOMAN OFFICE. 

JOHN H, HARNEY, PUBLIC PRINTER. 

1868. 



\ 



/ 




V 



REPORT 



STATE AGENT FOR KENTUCKY 



AT WASHINGTON, 



MADE TO THE GOVERNOR, JANUARY 1, 18G8. 



FRANKFORT, K Y . : 

PiilNTED AT THE KKN'TUCivY VKOMVX OFFICE. 

JOHN H. HARNEY, PUBLIC PRINTER. 

18G8. 



GOVERNOR'S LETTER. 



Executive Office, ) 

January 10, 1868.} 

Gentlemen of the House of Representatives : 

I herewith transmit the Eeport of Col. C. D. Pennebaker, the Agent of 
Kentucky at Washington, charged with the duty of liquidating the claim 
of the Commonwealth against the United States for moneys advanced and 
otiher expenditures incurred during the war. 

This Report presents an interesting detail of the operations of the 
Agonv.y during tlic past year. It exhibits the amount at this tinio due by 
the Federal Government to the State of Kentucky, and is accompanied by 
suggestions of the Agent, which I earnestly commend to your considera- 
tion. 

The law establishing and continuing the Agency will expire by limita- 
tion on the 27th February, 18G8. 

I recommend an enactment continuing this Agency until the large claim 
shown b}^ this Report to be due the State of Kentucky by the United 
States is adjusted and paid. 

J. W. STEVENSON. 



REPORT OF KENTUCKY STATE AGENT. 



Office Kentucky State Agency, I 

Washington, D. C, January 1, 1868. ) 
To His Excellency J. W. Stevenson, Governor of Kentucky : 

Governor: I have the honor to submit the following report of the 
business of this office for the year ending December 31, 1867. 

I shall confine myself to the business transacted within the year, except 
on that portion appertaining to the " War Claim," with reference to 
which I submit three tabular statements; the first showing the amount of 
each installment, the amount paid, the amount withdrawn, and the amount 
suspended and disallowed, and the amount now due upon each installment. 

Q'he second shows the aggregate amount due the State, as represented 
by all of the installments on file, the amount paid, when, and to whom 
paid. 

The third shows only the amount collected and canceled within the 
year ending of this date. 

Under the head of War Claim this subject is explained in detail, with 
such suggestions and recommendations as I have thought would be of 
interest to you, and of advantage to the State in the collection of this 
debt. 

The subject of pensions, bounties, &c., to soldiers and their heirs, will 
be found fully treated of under this head; as also the subject of claims 
before the Quarter-Master and Commissary Department, under appro- 
priate heads. 

During the year there have been received and registered in this office, 
claims from No. 6,581 to No. 9,057, inclusive, making, for the year just 
closed, 2,476 claims. 

The number of claims received during the first half of the past year 
was largely in excess of that for any previous year ; but the receipts fell 
oif to a considerable extent during the latter part of the year, still making 
the number of claims received greater than that of any former year. 

The number of letters of inquiry received with reference to claims filed 
through this office, as also for those filed by claim agents, has increased 
to a very great extent; to dispose of which, in a proper and satisfactory 
manner, requires the constant services of the Agent, or one of the clerks 
in his office. 

I cannot give the exact number of letters received during the year, but 
can safely set the number at 15,000. 

The letters written by this office during the year may be stated as fol- 
lows: January 1, 1867, Letter-book No. 18, to January 1, 1868, Letter-book 



b REPORT OF STATE AGENT. 

No. 25. These books will average 900 pages each, making a total of pages 
of 5,400. On very many pages there are two or three letters and indorse- • 
ments, so that the number of letters issued from this office can safely be 
Stated at 9,847, of whicli number copies are retained. 

Thirtj'-fbur circular letters have been issued b}' this office, covering as 
many, if not more, than that number of subjects. At least 5,000 per 
annum are mailed to claimants in lieu of manuscript letters, and of which 
no trace appears upon the letter-books of this office. This increases the 
number of letters sent during the past year to 14,847. 

A very large number of letters of inquiry has been investigated and 
answered, of which no copies were retained. During the year 12,323 
names have been entered upon the indexes of this office. 

PENSIONS AND BOUNTIES. 

Very large numbers of these claims have been received, recorded, and 
filed before the proper Departments for adjudication, during the past 
year — quite as many as have been received during any of the previous 
years since this office has been in operation. In fact, the acts of July 
28th, 1866, providing for the paj^ment of one hundred dollars additional 
bounty to three-years soldiers and their heirs, and June 6th and July 
25th, 1866, granting increase of pensions, have greatly increased the num- 
ber of tliis class of claims. 

Of the numerous and various classes of pension claims filed within 
the last year, a very considerable proportion has been settled, and 
certificates issued, although much delay has been experienced in their 
settlement, from the fact, as a general thing, that claimants throughout 
the country employed local agents, or attorneys, to prepare and forward 
their claims, directing me to correspond with said agents or attorneys 
with reference to their claims, which I have done until otherwise directed 
by claimants; and, in many cases, when the claims were forwarded to 
me, they had to bo returned for correction, or for preparation on the pre- 
scribed form; and after they were filed and passed through a preliminary 
examination in the Pension Office, it was found that additional evidence 
was required, in almost every case, to complete the claim; and when the 
local agent or attorney was called upon to furnish the evidence required, 
it was found, in many instances, that he had removed, without notifying 
this office, and much delay was caused in finding the wliereabouts of the 
claimant, in order that he or she might be addressed directly. Even 
where said agents or attorneys could be reached by mail, and were noti- 
fied of what was required to complete the claim, or claims, which they 
had forwarded, they, in many instances, did not furnish the evidence 
called for for months, and in some cases neglected it entirely. Tiiis, when 
discovered, was remedied as soon as possible by seeking out the post office 
address of the claimants, and addressing them direct. 



BEPORT OF STATE AGENT. 7 

Of the very large number of bounty claims which have been received 
and filed, more than two thirds of them are for the additional bounty 
under act July 28, 1866, and but a small per centage of those of discharged 
soldiers, which have been filed before tlio Paymaster General for settle- 
ment, have been paid, although many of them have been on file for twelve 
months, and some longer. The delay in the adjustment of these claims 
is caused (as alleged by the Pay Department) by the Paymasters not 
being able to got the soldiers' military history from the muster and pay- 
rolls on file in the office of the Second Auditor of the Treusiirj^ upon 
which payment of these claims is based. This delay has caused a great 
deal of uneasiness and impatience among claimants; and this office is in 
daily receipt of large numbers of letters of inquiry from them, which 
occupies the time of one clerk, almost entirely, to look up the claims and 
answer these letters, and especially those claimants whose chtims were 
not filed through this office — who, when writing about their claims, give 
but ver3^ meagre information, and, in many cases, none at all, except that 
their claim was placed in the hands of some claim agent for prosecution. 
These cases always involve one or more trips to the departments to 
obtain the information desired by claimant. 

Officers' Accounts. 
Up to this date, 480 of these accounts have been received and regis- 
tered ; and of this number, 280 have been finally settled by procuring 
certificates of non-indebtedness from the Quartermaster's, Commissary, 
and Ordnance Departments, and from the Second and Third Auditors of 
the Treasury, and collecting their final pay due them on muster out of 
service, leaving 200 still unsettled. Of the number now on hand, many 
are in proccL-;-* of settlement, while, in some instances, the officers seem 
to be willing (so far as anj'^ action upon their part is concerned) to leave 
their accounts unsettled, or allow them to go by default, as they have 
neglected to comply with the requirements of the departments and 
instructions from this office, after being repeatedly advised of what was 
required to complete and insure a final settlement. 

.This branch of business required a great deal of time and labor, more 
in proportion to the number of claims than any other, from the fact that, 
in the beginning of the late war, and for one and two j'cars afterwards, 
many officers neglected to render returns of property, for which they were 
accountable to the Departments according to regulations, or were not 
aware of the fact that it was obligatory upon them to do so; hence, when 
the}' were discharged from service, application was made for the final pay 
due them on muster-out, and they were required to account ibr the proj)- 
erty for which they had omitted to render any returns; and this could 
only be done" in a very imperfect manner, and in many cases they were 
unable to render any at all. Here, then, followed a voluminous corres- 
pondence — the preparing of affidavits, and the collection of the proper 



8 REPORT OF STATE AGENT. 

proof to satisfy the accounting officers of the Treasury of the proper dis- 
position made of the propertj' for which they were accountable, and for 
which they had failed to render any returns. 

It would be proper to add, that much of this trouble was also caused 
by the unavoidable loss of books and papers by capture and other casual- 
ties of war. 

Captain B. F. Pumphrey, who has been chief clerk in this office since 
October, 1864, has had special charge of this branch of the business for 
the last year, and has transacted it with great energy. The carelessness 
which characterizes the preparation of such claims, as well as the ad- 
ditional evidence in support of them, has always been, and continues to 
be, a source of great embarrassment. It is useless to insist upon favorable 
action by the departments until the record is made to conform to the law 
and regulations. For failure in this respect this office h not accountable. 

ADJUTANT GENERAL'S EEPOET OP KENTUCKY. 

I have received eighty-eight (88) copies of the Adjutant General's lie- 
port of Kentucky for the heads of Departments and Bureaus of the Gen- 
eral Government. Nearly all of these books have been distributed where 
it was thought the information contained would be of the greatest value 
to the State, and to those persons who hold claims against the United 
States. 

The work has been of great value to citizens and claimants, and to the 
State in the settlement of the War Claim. To show how the Keport has 
been received, and the value placed upon it as a book of reference, I sub- 
rait four letters which I have received from heads of Bureaus in acknowl- 
edgement of it, marked F, G, H, and I. 

r. 

Department of the Interior, Pension Office, ) 

Washington, D. C, January 4th, 1868. ) 
Sir: I have the honor to acknowledge the receipt of ten copies of the 
Eeport of the Adjutant General of the State of Kentucky. Without 
epeaking disparagingly of other similar works, I regard tliis as the most 
complete and satisfactory one that we have yet received. It traces the 
career of every officer and enlisted man who entered the military service 
Gf the United States from the State of Kentucky during the late war, and 
will afford us valuable aid in adjudicating claims based upon the service 
of Kentucky soldiers. Be pleased to accept my thanks for your agency 
in furnishing us with this admirable report. 

I have the honor to be, very respectfully, 
Your obedient servant, 
(Signed) JOS. H. BAEEETT, Commissioner. 

Col. Chas. D. Pennebaker, 

Military Agent for the Utate of Kentucky, Washington^ D. G. 



REPORT OP STATE AGENT. : 

G. 

United States Patent Office, ") 

Washington, D. C, Dec. 2Sth, 1867. j 
Col. C. D. Pennebaker, Military State Agent for Kentucky, Washing- 
ton, D. C: 

Colonel : I have to thank you for a copy of the Jlcport of the Adjutant 
General of Kentucky in two hirge well-bound volumes. 

Allow me to suggest that it would be well that a copy of this Peport 
should be presented to every Department and Bureau of the General Gov- 
ernment, to remain as an enduring monument of the valor and patriotism 
of the loj'al people of that groat State. 

1 am satisfied that it is not sufficiently understood here how great were 
the sacrifices, devotion to the Union, and energy of that portion of our 
people during the late rebellion. Moreover, the report has been and will 
be of great value to the State in the settlement of her accounts against 
the United States for advances of money made in arming and equipping 
Kentucky troops for the Federal army. 

Having been in tlie service as a volunteer from the State, I have ex- 
amined the Report with a good deal of interest, and have found it com- 
paratively free from error, and well arranged and printed. 

As a citizen of the State, I am proud of this report. 

Very respecfully, 
(Signed) A. M. STOUT, Chief Clerk. 

H. 

Second Auditor's Office, Treasury Department, ") 
Winder's Building, December 2-lith, 1867. J 
Dear Sir: I have the honor to acknowledge the receipt of eight (8) 
sets (vols. 1 and 2) of the "Eeport of the Adjutant General of the State 
of Kentucky," from 1861 to 1866, inclusive, for which please accept my 
thanks. • 

I find it very valuable in tracing the military history of Kentucky vol- 
unteers, as it materially facilitates the work of the office in the settlement 
of the accounts of the officers and soldiers in their claims against the 
United States Government. 

Very respectfully, 
(Signed) E. B. FEENCH, Auditor. 

Col. C. D. Pennebaker, Kentucky State Agent, Washington, D. C. 

I. 

Treasury Department, 1 

Third Auditor's Office, December 26th, 1867. j 
Colonel : I have the honor to acknowledge the receipt, by your courtesy, 
of eleven (11) copies of the "Eeport, in two volumes, of the Adjutant Gen- 
eral of the State of Kentucky, for the years 1861 to 1866, inclusive." In 



10 REPORT OF STATE AGENT. 

acknowledpjing the receipt of these valuable State docum(>tits, and thank- 
ing you for supplj'ing the office so liberally, permit me to add, tliat the 
frequent refereaco to them, in the examination of accounts, shows that the 
■work has been gotten up with great care and accuracy; reflecting as 
much credit on the State officers who compiled them, as tiiej' afford us 
facility and satisfactory' evidence in adjusting settlements. 
I am, very respectfully, 

Your obedient servant, 
(Signed) JOHN WILSON. Av^ilfor. 

Col. C. D. Penxebaker, Kentuckxj State, Agait, Viashnujion, 1). <'. 

QUAETEE-MASTEK AND COMMISSAEY CLAIMS, 

To a large number, running Irom one to fifteen thousand dollars in amount, 
have been filed in the departments lor collection. The accounts amount 
in the aggregate to a very large sum, upon which a very small per centum 
has been paid. 

A majority of these claims were prepared in strict accordance with the 
act of Congress of Julj' 4, 1S64, but few of which were supported either 
b}' vouchers or receipts. Those tiiat were not, although supported by the 
evidence of citizens of known respectability and worth, and whose evi- 
dence, in any court of law, would be taken without hesitntion, have been 
rejected, witli the remark "that the evidence was not sufficient to satisfy 
the Quarter-Master General or Commissar}' General (bt'ioro whomsoever 
the claim ma}' have been) that the property charged for was taken for, 
was used by, and became the property of, the United States;" and this, 
too, wlien the claim was prepared according to, and in every respect com- 
plied with, the act of July 4, 1864. 

Vouchers, certified by the proper officers, viz: brigade, post, or regi- 
mental quarter-niasters, and approved by either a major general, brigadier 
general, or colonel, are returned without approval, indorsed as follows: 
"Property' not accounted for by the certifying officer." 

Since January 1, 18G7, the War J^epartment, not satisfied witli rejecting 
claims under act of July 4, 18G4, substantiated by evidence and voucher 
as above stated to be certified and approved, has retained and refused to 
return to the owners thereof tlnMr certificates and other evidences of in- 
debtedness against the Government. 

When all objections in the way of the validity of a claim are success- 
fully ansAvered by the claimant, tiien the Department raises the question 
of loyalty, which is referred to the Agent of the Preedmen's Bureau for 
the district in which the claimant resides. That movement on the part of 
the Government is, in most cases, fital to the claimant, and this office is 
notified that the Department "has official information that the claimant 
was disloyal to the United Stales Government durir\g the rebellion. 
Claim is therefore rejected." 

In order to obviate this last difficulty, I have, in every case where it 



REPORT OF STATE AGENT. 11 

conld be obtained, filed tlio certificate of two United States officials, either 
civil or njilitarj-, certiljing in the most positive languar!;e that the claim- 
ant was. to their knowledge, strictly loj-al during the rebellion ; yet it fails 
to have any effect when, in tact, it is the evidence of two United States 
oflScials for, to one against, the claimants loyalty, and brings from the 
Department the following; "The additional evidence filed by you is not 
Bafiicient to warrant a re-examination of the case. Ail papers in relation 
to rejecti.i jiaims are retained." 

In quite a number of cases where the last quoted notice has been 
received by this office, further action has been had, whiuh has resulted in 
ehowing, to the entire satisfaction of the G-overnment, that the agents of 
the Fies'd men's Bureau, in their haste to make themselves popular with the 
chiefs of Bureaus, have reported as disloyal their fellow-citizens, and, in 
some instances, their neighbors — men who have served their State and 
countr}' for not less than three years in the Union arm}-, enibracing sol- 
diers of all grades, from the surgeon of a regiment to a private. 

The Department pei-sistently refuses to inform a claimant who the per- 
son is that reports him as being disloyal, thereby, in a great measure, 
cutting off the only source a claimant has to controvert the report made 
against him, by showing that the accuser is in error, and wherein he does 
err. This system, so long prevalent with the Gi-eneral Government, and 
which is so rejuignant to our ideas of republican institutions, has been a 
Bource of infinite annoyance, as well as of untold losses, to citizens of 
the State. 

A short time since I, through accident, became aware who reported 
as disloyal a claimant who, during the war, or for three years, ranked 
as a Major in one of Kentucky's best and favorite (if a favorite she 
had) regiments; and meeting him in this city, asked him why he had 
done so? The only apology he made to me in person for this act of great 
injustice and humiliation inflicted upon a brave and gallant officer was, 
that " he did not know him." For six years previous to his entering the 
army the Major represented the district adjoining the one in which the 
(now) Agent of the Freedmen's Bureau resided, in the Senate of Ken- 
tucky. Still the Agent did not know him. 

The facts in this case were by me laid before the Quarter-Master Gen- 
eral on the 24th of December last, and, as yet, I am not informed by him 
as to what action, if an}-, he will take in the case. 

Truly, the people of Kentucky have no reason to compliment the 
Quarter-Master's Bureau for its selection of agents to report upon their 
loyalty. 

I have entered into this subject to this extent merely to vindicate 
myself, and to show to the citizens of Kentucky, who have placed their 
claims against the United States in my hands for collection, where the 
delay is, and the troubles and difficulties that are thrown in my way by 
the departments and their agents, when seeking to obtain payment of 



12 REPORT OP STATE AGENT. 

claims based upon law. equity, and justice, and prepared in strict com- 
pliance with acts of Congress. 

In conclusion, I would state that all claims which I have filed, where the 
loyalty of the claimant has been proven in strict conformity with circular 
letter A, issued by this oflSce, will eventually be paid. 

THE WAE CLAIM OP EENTUCKT. 

Under this head I propose to show the present condition of the "War 
Claim,"' or the claim of the State of Kentucky against the General Gov- 
ernment, for advances made for arming, equipping, &c., troops for the 
United States service, and what has been done towards the collection 
thereof. 

The first installment of this claim amounted in the aggregate to 
$753,752 47, upon which there has been paid §752,716 59, leaving the sum 
suspended and disallowed, $1,035 88. This installment may be regarded 
as closed. 

The final difference sheets explaining suspensions and disallowances are 
now in the office of the Quartormaeter General of the State. $52,743 58 
was retained on this installment for sales of Government property made 
by the Quarter-jMaster General of Kentucky, and reported. 

Second installment, amounting in the aggregate to $34,457, was com- 
posed entirely of money expended by the State for paying and subsisting 
Home Guards or irregular troops employed by order of Generals Ander- 
son, Nelson, and Thomas, in the winter of 1861 and '62, for the purpose 
of guarding the Kentucky Central .Railroad, Lebanon Branch Kailroad, 
and the Locks and Dams on Green Eiver — all of which was suspended 
because the troops so emploj'ed had not been mustered into the United 
States service. 

After much time had been expended, I finally obtained an order from 
the Secretary of War, accepting the services of the men thus employed, 
which resulted in procuring an allowance on this installment of $31,860 55, 
and $4,740 90 on the first installment. 

There remains suspended and disallowed on this installment $2,596 45, 
the greater portion of which is made up of overpayments and errors in 
calculations and extensions. 

The final difference sheets rendered by the Treasury Department are 
now in the office of the Quartermaster General of the State. 

Third installment amounts to $340,478 63, upon which $325,564 01 has 
been allowed, leaving $14,914 62 suspended and disallowed. Of this aum, 
a large portion is susceptible of explanation, and will be paid. 

Many of the explanations furnished for the re-examination of this 
installment were regarded by the accounting officer as insufficient, but 
were either satisfactorily amended by this office, or the Quarter-Master 



REPORT OF STATE AGENT. 13 

General of the State notified of all deficiencies, day by day, as tlio settle- 
ments progressed. 

The diflfereiice sheets are on file in the Quarter-Master General's office. 

Fourth installment amounts to $671,257 05, upon which has been paid 
$554,886 89, leaving suspended and disallowed ^116,374 16. 

The paj'-rolls showing the amount of monej' paid — one month's pay in 
advance — to encourage enlistments b}' the State, make up the largest por- 
tion of this itistallment. Upon the first examination of the payrolls by 
the accounting officer of the Treasury, there was suspended the sum of 
$75,161 61. The suspensions on this branch of this installment are of two 
classes, viz : 

First. The amount of $13, paid in advance to each soldier whose name 
appears on the State muster-in roll, but not on the original United Slates 
muster-in roll. 

The sum suspended on this account will amount to §46,022 77. These 
sums were suspended because the men who received the money had not 
been mustered into the United States service; but, upon a close examina- 
tion of the act of Congress of Jul}' 27, 1861, and the rules of the Treasury 
Department made to carry the same into eflFect, it was discovered that the 
State should be reimbursed as well for expenses on account of men who 
were actually emploj'ed in, "as those who were mustered into the United 
States service." (See rule 11, on paper A, made part hereof.) Upon the 
alternate proposition contained in that rule, I submitted to the War De- 
partment the letter filed herewith, marked B, togetlier with the depositions 
of a large number of the most prominent officers of Kentucky regiments, 
in support of the views contained in my letter. The question has not, as 
yet, been fully determined, but I am led to the belief, by the kindness and 
courtesy of those who have the matter in charge, that all is progressing 
satisfactorily, and that the question will be finally determined in favor of 
the State. 

I deem it unimportant to submit the correspondence on this subject, 
except the letter before referred to, although the publication of it might 
be creditable to the enei-gy and perseverance of this office. 

After the question with reference to tho enlisted men shall have been 
determined b}^ the War Department, 1 'nave to present another of no less 
importance, which results from the fact that, in paying the officers their 
first month's pay in advance, they were paid, by disbursing officers of the 
State, full commutation for servants, amounting to S24 50 for each officer 
who was entitled to one servant, and $49 for field officers who were each 
entitled to two servants. 1 am well satisfied that this question can be 
successfully presented. Thei-e is involved in it $29,083 84. 

The volume of the differences on this installment, involving the vouch- 
ers which iiave been explained, has been examined by the Third Auditor 
of the Treasury, resulting in a further allowance of $34,3-11 78. leaving 
amount suspended on vouchers (excepting pay-rolls) $6,866 77; leaving 



14 REPORT OF STATE AGENT. 

aggrerrate susipGnsions on this instaliraent (inclu.ling p;i3'rolIs) the sum of 
$82,028 38. or this sum, S75.1G1 Gl is involved in the pa_y-roils. 

Filtli instMllment. $304,638 46, upon wiiich thero has been paid $203,- 
158 48, leaving suspended and disallowed the sum of $l!)l,479 98. Diifer- 
ence sheets are now in the hands of the Quarter-Master General of the 
State. 

Sixth installment amounts to $319,788 90, upon which there has been 
paid the sum of $235,334 40, leaving amount suspenJ.ed and disallowed 
on this installment §84,404 50. 

Seventh installment, ^47. All of which is suspended. 

Eighth installment, $193,697 71, upon which there lias been paid 
$2,472 06, leaving suspended $191,225 15. 

Ninth installment amounts to $132,451 01, upon which there has been 
paid $422 89, leaving amount suspended $132,028 12. 

Teiiili iiisiiiil.nent, $582,692 43. AU oi winch stands au.-^pended. 

At tins ]ioint it is proper that I should state, that, in my last annual 
report, 1 submitted a letter from the Third Auditor of the Treasury, 
"ni:;i-l<e(i jj," dated Defen.ber 26th, 1866. giving the ]iri.^fnt eond-fion of 
the Keniueky War iJlaim. This letter gave notice that the direct tax 
under act of August 5th, 1861, amounted to $606,641 02; and also that 
the amounts referred to had then to pass the revision of the Second Comp- 
troller of the Treasury before the settlement would be made official. On 
the 8th of February, 1867, I laid before the Grovernor an additional report, 
with accompanying statements, showing that the settlement of the install- 
ments reierred to in the Auditor's letter of December 26th, 1866, had been 
made offieial witii the following result, viz: 

Balance due the State per official statement of her accounts, $761,756 12. 
Of this sum, $606,641 02 was "covered into the Tre.isui-y b}^ a miscella- 
neous covering warrant," and the sum of $155,151 09 paid in cash. 

The eleventh installment amounts to $226,842 96, upon which thero has 
been ])aid the sum of $9,141 66— of which said sum $3,167 24 was ])aid in 
eash through this office. The balance. $5,974 42, having been retained by 
the Quarter-Master's Department of Kentucky for property sold by the 
State, and the proceeds retained and reported to have been credited lo the 
United Stales. 

One, voucher — No. 1 — from this installment, ordnance and ordnance 
stores, amounting to $146,000, was withdrawn and returned to the Quarter- 
Master General of the State. This voucher was withdrawn after iull in- 
vestigation and consultation with the State authorities, leaving the 
amount now sus])ended and disallowed $71,701 30. 

The 8th, 9lh, 10th, and 11th installments are comjirised principally of 
sums paid by the State for the maintenance of State troops for inland 
and border defenses during the recent war, and do not, therefore, come 
under the rules of the Treasui-y D.;i)artment established for the ])urp)se 
of doterminiug such claims. It is contended that the act of July 27, iS61, 



REPORT OF STATE AGENT. 15 

does not provide for the payment of such demands; hence the necessity of 
additional legislation by Congress for the relief of the State. 

This is a matter of great importance, and was made the subject of a 
special letter to your Excellency about the Ist of December last. 

All that is ro.piirviJ on this subject is to authorize the Commissioners of 
the Sinking I''uml to do whatever may bo regarded necessary to be done 
to reduce thi.s fuml to possession. 

I will novv, in conclusion of this branch of my report, call special atten- 
tion to the tabular statements, marked C and D, and the notes thereon, for 
the present condition of the War Claim. 

The transactions during the yeiiv ending December 31st, 1867, have 
resulted in reducing the War Claim due the State, in cash, S1,0G-I,5S3 20, 
Voticher withdrawn, ^146,000. Third Auditor's error, $21 83. Total, 
$1,210,608 113. (Sue Statement marked E.) 

1 regret that I have not been able to complete the account tliat must 
ultimatel}' be presented to Congress for additional legislation lor I'clief of 
the State. 

The act, a copy of which is hereto appended, docs not authorizo reim- 
bursements of a large portion of the money expended for war purposes. 

All the explanations which have been furnished me by your Quarter- 
Master General have been passed through the Tliird Auditor's Oiiice. 

It affords me much pleasure to state that every facility that I could ask 
has been granted me by the accounting officers ot the Treasury, and 
especially l)y the Third Auditor's Office, in the examination and settle- 
ment of this claim. I could have settled much more of it if the explana- 
tions could have been furnished to me from the Quarter-Master General's 
Office. It is of the greatest importance to the State that a sufficient force 
shall be retained in that office to compile and forward without delay ex- 
planations of the difference sheets as rapidly as possible. 

The expciises in compiling these explanations are conijuiratividy small, 
when the amount of interest upon the debt due from the United States 
is taken into consideration. The interest upon the balance due for the 
next year will amount to the sum of $77,909 73. This sum will more 
than live times cover the expenses of the most liberal eifort ever made by 
the State to secure paj-ment of the money advanced for the General Gov- 
ernment. 

Every reasonable effort should be made to close this account as soon as 
possible. It cannot be done unless a sutficient discretion is given to the 
agents chargjd with its settlement to meet such emergencies as may 
arise during the progress of its examination. 

On this branch ot the business of the office, I availed myself of the 
services of Fraiik C. Stevens, Esq., who has, since July last, rendered me 
valua'ole assi-<tancj; e-ipejially so in preparing the data for that i).>rtion of 
the " War Claim " which is not provided lor by the act ot July 27th, 18G1. 



16 REPORT OF STATE AGENT. 

It would have been impossible for me to accompliBh this work without 
his assistance. 

Your Excellency is aware that this office expires by limitation on the 
27th day of February, 18G8. As to whether it should be continued, ia 
view of facts submitted, is for j'ou to determine, and to make such recom- 
mendations on the subject as you may deem proper. 

The State of Kentucky has presented the lar^^est claim of any of the 
States for money expended for arming, equipping, clothing, subsisting, 
and transporting troops to be turned over to the United States service. 
The reason for this is the fact that the State subsisted, clothed, and sup- 
plied her troop? for several months between the time of their organization 
and muster into the United States service. 

A larger proportion has been paid to Kentucky than to any other State 
upon actual settlement made by the accounting officers of the Treasury. 

Other States have received larger sums of money by advancement, for 
which they stand charged upon the books of the Treasury. 



AN ACT to indemnify tlie States for expenses incurred by them in defense of the United 

States. 

Bo it enacted by the Senate and House of Representatives of the United 
Stai.:s of America in Congress assembled, That the Secretary of the Treas- 
ury i;e, and he is hereby, directed, out of an}' money in the Treasury not 
otherwise aj)propriated, to pay to the Governor of any State, or to his duly 
authorized agents, the costs, charges, and expenses properl}'' incurred by 
such State for enrolling, subsisting, clothing, supplying, arming, ecjuip- 
ping, ])aying, and transporting its ti-oops employed in aiding to suppress 
the present insurrection against the United States, to be settled u])ou 
proper vouchers, to be filed and jjassed upon by the proper accounting 
officers of the Treasury. 

Approved July 27, 1861. 

RULES for the preparation and settlement at the Treasury Department, under acts of Con- 
gress approved July 17, 1861, and July 27, 1861, of claims for reimbursement of expenses 
properly incurred by the States, respectively, on account of their troops employed in aid- 
ing to suppress the present insurrection against the United States. 

I. Accounts, with vouchers for all expenditures made, must be presented 
to the Secretary of the 'J'reasury, by whom the}' Avill be referred to the 
proper accounting officers for investigiition and settlement. 

II. It is only fur expenditures on account of troops, officers, or men that 
have been or m:>y be mustered and received into, or actually empkn-ed in, 
the service of the United States, that reimbursements will be made. Or- 
ganiz;itions raised, or attempted to be raised, but not mustered and received 
into, nor actually emploj^ed in, the service, will not be recognized. Nor 



REPORT OP STATE AGENT. 17 

will any reimbursement be made by the United States of expenses in- 
curred in organizing, equipping, and maintaining troops for State pur- 
poses, or home guard, whether called out by State or other local authority, 
unless such troops wore called out and such expenditures incurred at the 
request or under the authority of the President or the Secretary of War. 

III. Personal expenses of commissioned oflacers in recruiting their 
companies prior to their being mustered into service, will not be allowed; 
but commissioned oflScers may be allowed the same rates for subsistence 
and quarters (board and lodging) as privates, from the date of enrollment 
Until mustered into service. The necessary and actual traveling expenses 
of recognized military agents of the State, when accompanied by bills of 
particulars and receipts for payments, will be refunded. 

IV. Bills of particulars, with dates and rate of charge, and the receipt 
of the party to whom payment was made, must, in all cases, be furnished. 
It is not sufficient to show that a gross amount was expended; still less 
that sums were turned over to individuals to expend, without evidence 
showing that they were expended by them, and how they were expended. 
In short, original vouchers for expenditures of every description must be fur- 
nished. The expenditures should be classified, and separate abstracts, 
with the vouchers presented for pay, subsistence, clothing, transportation, 
arms and equipments, and other expenses; and they should also desig- 
nate, as far as practicable, the particular regiment or corps on account of 
which the expenditure was incurred. Claims for pay of troops must be 
accompanied with complete pay-rolls for each corps, properly certified and 
receipted, the same as are required in the regular service. 

V. Where subsistence in kind could not be furnished, and expenses were 
incurred for "board," or "board and lodging," the rates will depend on 
the section of country where furnished, and the price paid for complete 
rations at the nearest recruiting station or military post; and in no case 
will a higher rate be allowed than the amount actually paid. The bills 
must specify the regiment or company to which the troops so subsisted or 
quartered belonged, and that rations could not be procured. Bills for 
lodging will be restricted to cases where there were no tents, and quarterii 
could not be otherwise obtained. Purchases of subsistence in bulk will 
be paid for at not exceeding the current prices at the place of purchase, 
provided that the quantities are in proper proportions, or reasonably so, 
to the number of men, according to the rates of allowance in the Subsist- 
ence Department. The articles of subsistence must be such only as are 
recognized in the regular service, or, if other articles are substituted, the 
cost of the whole must not exceed the regular supplies. Bills for spirit- 
uous liquors, treating, expenses of holding elections for officers, will not 
be recognized or paid. 

VI. Transportation and quarters for troops at reasonable rates will be 
paid for. Transportation is restricted to the usual routes and modes of 

2 



18 REPORT OF STATE AGENT. 

conveyance, and excessive quantities will not be recognized. Charges for 
transportation by railroad or other public conveyance must be accompanied 
by bills of lading in cases of property or supplies; and for troops, the 
number of men, with the regiment or corps, must be distinctly set forth : 
and where the same has been done in pursuance of a contract, the contract 
must accompany the vouchers. The same provisions apply to transporta- 
tion by vessel. 

Yll. Claims growing out of impressment of property or services, and 
for damages done to individuals or their property, are not authorized to 
be paid. Provision for such claims must be made by special act of Con- 
gress, when not already provided for by general laws. 

VIII. Bounties or donations to men or their families, to induce men to 
volunteer, will not be recognized. Such bounties as may be authorized by 
law will be paid by the United States directly to the men authorized to 
receive them. Voluntary contributions, either by States or local corpora- 
tions, or by individuals, in aid of families of volunteers, &c., constitute no 
charge against the United States, and will not be refunded. 

IX. Each State must present its full and final accounts for reimburse- 
ment, under the acts providing therefor, up to the date of the passage of 
Baid acts. The proper authorities of the State should certify, over their 
official seals, that the respective amounts claimed to be refunded have been 
actually paid by said State, and tliat no part thereof has been paid by any 
disbursing officer of the United States. 

Approved : 

S. P. CHASE, 
Secretary of the Treasury. 

B. — [copy] 

Office Kentucky State Agency, ) 

Washington, D. C, Nov. 20, 1867. J 

Gen. U. S. Grant, Secretary of War, ad interim, Washington, B. C: 

Sir : I have the honor to again call your attention to a subject presented 
in a letter from the Third Auditor of the Treasury, of date August 2d, 
1867, having reference to reimbursing the State of Kentucky lor sums 
advanced to men enlisted for the United States service, and who died or 
were disabled in the line of duty before they were mustered, or actually 
received into the United States service, and to your indorsement thereon, 
in which you ask that, for illustration, some of the names of those who 
were disabled in line of duty, whose names are born on the muster-rolls of 
State, be forwarded, &c. 

I do not propose in this communication to give you the names of the 
recruits who died, or were discharged before muster into the United States 
service, but will refer you to the final Eeport of the Adjutant General of 
Kentucky for a complete list of them. The date of death, or discharge of 



REPORT OF STATE AGENT. 19 

recruits will appear on tho report referred to, anterior to the date of 
muster into United States service of the organization to which the recruit 
belonged. 

That all the recruits enlisted in Kentucky for the United States service 
were actually employed in tho service of the United States, under compe- 
tent authoritj', from the date of enlistment, there can be no doubt, in view 
of the proof herewith presented. I am therefore led to the conclusion, 
that the affidavits presented with tlu's, demonstrate the idea presented in 
your indorsement on the Auditor's letter more conclusively than any 
number of individual examples could possibly do; for if the recruits were 
all — those of every organization — actually employed in the United States 
service from the date of enlistment, the Ciovernment should, after having 
accepted and profited by the services rendered by them, be responsible for 
the month's pay advanced, as well to the recruits as to those actually 
mustered and technically received into the service of the United States. 
More particularly should this rule be adopted, when it is remembered 
that the greater number of the Kentucky troops, enlisted in 1861-2, were 
not accepted into the United States service for several months after organi- 
zation and acceptance by the State authorities, and corresponding service 
under the orders issued from what was deemed and obeyed as proper 
authority. 

It was not the fault of the State that the organizations were not mas- 
tered into the United States service as soon as completed, and it was 
certainly not the fault of the recruit. It is, therefore, not only just that 
the State should be reimbursed for money advanced in good faith by the 
State, for thpi benefit of, and at the request of the authorities of the Uni- 
ted Staiyi-', but it is eminently just to the memory of all those who died 
or were discliarged before muster into United States service, that their 
services and j):itriotic intentions should be recognii:ed by tho proper De- 
pui'Un:'.-)'^ '^•~ i".ii (Tovernment, by having tlieir names properly- recorded. 
The Stale of Kentucky, in 1861, had no camps or rendezvous, with 
United States Mustering Officer, to accept companies and regiments as 
soon as organized; but their camps were established at points most eligi- 
ble for the defense of the border, and men were placed on duty as soon as 
they arrived at camp, to execute orders of officers placed in command by 
the War Department. Of this no one complained at the time, but all 
recognized the necessity, and cheerfully performed the duties assigned 
them, whether it was guarding depots of public property, making recon- 
noissances to ascertain the position, force, and intentions of the enemy, or 
engaged in active campaigns — all alike were cheerfully executed by the 
recruits enlisted for United States service in Kentucky in 1861. In view 
of these facts, all of which are abundantly established by the papers here- 
with submitted, it is not alone in the interest of the State that I make 
this appeal, but greatly to vindicate the memory and service of patriotic 



20 REPORT OF STATE AGENT. 

citizens who responded to the call of the Government and lost their lives, 
or destroyed their health in the service before it was possible for the Gov- 
ernment to technically accept them. I therefore, on behalf of the State 
of Kentucky, request an order from your Department, accepting the 
services of the recruits in question, so that the State may be reimbursed 
for the 813 advanced to each one to promote the interest of the Govern- 
ment and to facilitate enlistments. 

I herewith submit the following papers to show actual employment, 
tinder competent authority, between the date of enlistment and muster-in, 
and acceptance by the United States: 

1. Letter of Third Auditor, addressed to the Adjutant General of the 
Army, dated August 2d, 1867, and indorsement thereon, dated August 9th, 
1867. 

2. Letter from this office, addressed to Hon. J. M. Brodhead, dated Oc- 
tober 11th, 1867. 

3. Keply of Second Comptroller October 11th, 1867. 

4. Affidavit of Brigadier General W. T. Ward, United States Vol- 
tinteers. 

5. Affidavit of ex-Governor Thos. E. Bramlette. 

6. Affidavits of Generals D. W. Lindsey and Geo. W. Monroe, late of 
22d Kentucky Volunteers. 

7. Affidavit of Brevet Brigadier General A. M. Stout, late Colonel 17th 
Kentucky Volunteers. 

8. Statement of J. Smith Hurt, late Colonel 24th Kentucky Volunteers. 

9. Affidavit of Lieut. Colonel John H. Ward, late of 27th Kentucky 
Volunteers. 

10. Affidavit of B. F. Pumphrey, late Captain Company I, 27th Ken- 
tucky Volunteers. 

11. Affidavit of John A. Joyce, late Adjutant 24th Kentuckj' Volunteers. 

Very respectfully, your obedient servant, 
(Signed) C. D. PENNEBAKEK, Agent State of Kentucky. 



REPORT OF STATE AGENT. 



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24 REPORT OF STATE AGENT. 

INTEEEST. 

It is a well-known fact, that for the purpose of defraying the cost, 
charges, and expenses properly incurred for enrolling, subsisting, clothing, 
supplying, arming, equipping, paying, and transporting her troops, the 
State was obliged to borrow large sums of money, upon which interest 
was paid. The State could not have accomplished that which was ex- 
pected of her, and that which she was directed to do by the authorities of 
the United States, without resorting to loans for the purpose of raising the 
means to do it. The United States at that time, to-wit: in 1861 and '62, 
was wholly unable to provide the requisite funds to put an army in the 
field, in such vast numbers as was called for by the Chief Executive of the 
United States — hence, the State of Kentucky, to comply with the requisi- 
tion made upon her, advanced both men and money. 

Upon that portion which she was compelled to borrow at interest, the 
United States is as much bound to reimburse the interest as the principal. 

That legal interest paid, or that which has accrued upon a debt due, 
becomes a part and parcel of the principal debt, is an established fact, 
founded upon statutes, as well as judicial precedents. 

I have notified the Treasury Department of the United States that the 
State of Kentucky would set up a claim for, and demand of the Govern- 
ment, reimbursement for all the interest paid on money borrowed and 
used for war purposes during the late civil war. 

I have also requested the Quarter-Master General of the State to pre- 
pare the account showing the amount of interest paid by the State, with 
such suggestions as to the proper proof of the account as I thought neces- 
sary to establish the same. The account has not been received at this 
oflfice. 

I will now proceed to note the authorities upon which this claim is 
based, in acts of Congress, opinions of the Attorney General, and the 
accounting officers of the Treasury. 

I will first cite you to the Second Comptroller of the Treasury, as he is 
the first revisory officer. 

In a volume published in 1865, entitled "A Digest of the Decisions in 
the Office of the Second Comptroller of the Treasury," on page 25, section 
166, on the paying of interest to States, he says: * * * « But, in cases 
where the claimant has been compelled to pay interest for the benefit of 
the Government, it then becomes a part of the principal of the claim, and, 
as such, is allowable. Such is the case of a State which has been obliged 
to raise money upon interest for the suppression of hostilities against 
which the United States should protect her. In such cases, the amount 
of interest actually and necessarily paid will be allowed, without refer- 
ence to the rate of it." 



REPORT OF STATE AGENT. 

This decision was made b}'' the Second Comptroller of the Treasury, under 
date of November 1st, 1851, upon a statement and papers transmitted to 
that office fi'om the Third Auditor of the Treasury, relative to the claim 
of the State of Florida for reimbursements of the principal and interest 
of money borrowed by that State to protect itself against- the Seminole 
Indians. (See act Feb. 27, 1851, Statutes at Large, vol. 9, page 573.) 

The Second Comptroller, in s'upport of the above decision, says : " The 
I>rinciples applicable to this case are very distinctly stated in the opinion 
of Attorney General Wirt {see Opinio7is of Attorney General, page 342), 
in a similar claim by the State of Virginia." 

The Attorney General remarks: "The principle is this: The United 
States are bound by the relation which subsists between the General 
and State Governments to provide tiie means of carrj'ing on war, and, as 
a part of the business of war, to provide for the expenses of the several 
States. Where the United States fail to make such provision, and the 
States have to defend themselves by means of their own resources, the 
expenditure thus incurred forms a debt against the United States which 
they are bound to reimburse! If the expenditures made for such purpose 
are supplied^ from the Treasury of the State, the United States reimburses 
the principal without the interest; but, if being itself unable, from the 
condition of its own finances, to meet the emergency, such State has been 
obliged to borrow money for the purpose, and thus to incur a debt upon 
which she herself has been obliged to pay interest, such debt is essentially 
a debt due by the United States ; and both the principal and interest are 
to be paid by the United States; so that whenever a State has been 
obliged to pay interest, by reason of her taking the place of the United 
States, in time of war, such interest forms a just claim against the United 
States." 

Attorney General Berrien, recognizing the same principle (Opinion 
Attorney General, p. 794), says: 

"The ordinary cases of claims against the Government, which, how- 
ever undoubted, are not payable until demanded, and then without inter- 
est, unless the claimant shall have paid interest, in which case, indeed, 
interest becomes strictly a portion of the principal of his claim; and this 
is the rule that has always been adopted by Congress." 

The act of Congress of February 27th, 1851, vol. 9, ^jagre 573, United 
States Statutes at Large), upon which the foregoing decisions of Second 
Comptroller were based, and precedents referred to in support thereof, viz : 

"For reimbursing the State of Florida under such rules and regulations 
as have heretofore governed the adjustment of similar claims of the sev- 
eral States on the United States for money advanced and paid, and for 
expenses incurred, and obligations contracted by said State, for subsist- 
3 



26 REPORT OF STATE AGENT. 

ence, supplies, and services of local troops called into service during tbe 
year eighteen hundred and forty-nine, by and under authorities of said 
State, seventy-five thousand dollars." 

The act of Congress just referred to, not only in the most complete and 
authoritative Inanner confirms all the past acts of the Government in the 
paj'^ment of interest, but it is mandatory in the most general aensn to 
reimburse vStates for interest paid under all similar circumstances. 

A State, under the Federal Constitution, has no right to levy war or 
make peace; it is therefore not chargeable with any portion of the legiti§ 
mate expenses of a war when levied and proclaimed by the Government 
of the United States, except such pro rata share as may be levied and 
assessed upon the property and business of its citizens to pay the debt 
incurred by the United States resulting from war. 

If, then, a State, from motives of patriotism or necessities resulting in 
the defense of its own border, shall take the place of the Government of 
the United States in obedience to the orders, or the request thereof, and 
furnish large bodies of troops, and pay large sums of money which the 
United States, under its organic law, was alone bound to pay for main- 
tenance of war, the State should be reimbui'sed in full, principal and 
interest. 

A State, under all such circumstances, brings itself within the act of 
Congress of February 27th, 1851, and the distinguished precedents refer- 
red to in the decision of the Second Comptroller in the case of the State 
of Florida. 

The act of Congress is sufficiently comprehensive and general in its 
provisions to authorize affirmative action by the accounting officei's of 
the Treasury under all similar circumstances. 

No unprejudiced mind can take hold of the subject and say that Ken- 
tucky, in the advances made by her in money and iiroperty during the late 
civil war, was not situated precisely as Florida was, when she was compelled 
to raise money to defend herself against the incursion and depredations of 
the Seminoles. 

There is therefore no apology for assuming that the act in the case of 
Florida was special, otherwise than that the word Florida was used in the 
act. 

I would also call attention to the following acts of Congress in support 
of the claim of the State of Kentucky for interest. (See vol. 4, United 
States Statutes at Large, act March M, 1^25.) This act directs the Secretary 
of the Treasury to liquidate and settle the claim of the State of Virginia 
against the United States, for interest upon loans or moneys borrowed, 
and actually expended by her for the use and benefit of the United States 
during the late war with Great Britain. {See vol. 9, United States Statutes 



REPORT OP STATE AGENT. Zl 

at Large, page 236.) Act June 2, 1848, eection 3, provides that it shall be 
lawful to pay interest, at the rate of six per cent, per annum, on all sums 
advanced by States, corporations, or individuals, in all cases where the 
State, corporation, or in<liv)dual paid or lost the interest, or is liable to 
pay it. See also vol. 9, United States Statutes at Large, act March od, 1851, 
page 626, vs;'hich authorizes and directs the Secretary of War to reimburse 
the State of Georgia for all interest actually paid upon money borrowed 
for public defense against certain Indian tribes, from 1835 to 1838. 

The acts of Congress above referred to all recognize the obligation of 
the United States to reimljurse a State for interest actually paid upon 
loans, or money borrowed to defray expenses of public defense. Two of 
them seem to have been passed for a special purpose; but the act in the 
case of Florida, and that of June 2d, 1848, whilst their immediate object 
was for the benefit of States named, are sufficiently general and mandatory 
in their provisions to authorize the reimbursement of interest actually 
paid by States during the late civil war. 

I have the honor to call your attention to the expenses of the office for 
the year ending December 31, 1867, as per statement marked K, hereto 
attached. The expenses thus incurred should be refunded. 

This office should be supplied with the Statutes of the State, the Jour- 
nals and Documents of the Senate and House of Eepresentatives, for the 
time it has been in existence. Much embarrassment not unfrequently 
results from the absence of such records. 
I am, sir, very respectfully, 

Your obedient servant, 

C. D. PENJSEBAKER, 
Agent State of Kentucky. 



28 EEPORT OF STATE AGENT. 



Office expenses for the year ending January \st, 18H8, not provided for by law. 

1667. 

Morrison & Co., bill of stationery $168 57 

W. H. Moore's bill of stationery 45 51 

Postage "_ 315 54 

Coal 1 40 00 

Gas 12 00 

Salary p'lid C. B. Hinton from January 1st, 1867, to June 19tli. 1867 560 00 

Salary paid W. Stewart, February, 1867 .fjO 00 

Salary paid C. E. McAlister, July and Augu.^t, 1867, 50 00 

Salary paid F. C. Stevens, from July l:st, 1867, to December 1st, 1867 750 00 

Expenses to New York relative to jjay-rolls, fourth installment War Claim. 30 00 

Bill Kentucky yeoman, for printing act of Legislature : 7 50 

Telegram, War Claim 6 55 

Flxpress charge ' 5 50 

Trip to Kentucky in June, 1867, on State business 64 70 

Contingent expenses on State business 74 00 

$2,179 87 



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